Govt Hikes Excise Duty on Petrol, Diesel by ₹2 per Litre

The Indian government has passed a reshaping amendment to raise the excise duty on petrol and diesel by ₹2 per litre, effective April 8, 2025. The hike comes at a time when the global crude oil price is falling to the lowest level since April 2021, driven by the continued market fluctuations and trade pressures caused by US tariffs.

Despite the change in oil prices, Indian consumers will not be benefitted at the retail level. The rise in the excise duty will not affect the pump prices directly, even at a time when Brent and WTI crude benchmarks dropped by 10% last week — Brent at $63.35 per barrel and WTI at $59.77, as mentioned by the Ministry of Petroleum and Natural Gas.

This announcement has sent shockwaves across the stock market, with oil marketing companies (OMCs) witnessing sharp declines. Reliance Industries slipped 2.80%, Indian Oil dropped 1.65%, Hindustan Petroleum fell 2.75%, and Bharat Petroleum closed down 1.34%.

The move has drawn sharp criticism from the opposition. Congress President Mallikarjun Kharge said, "Since May 2014, crude oil prices have fallen by 41%, yet the government has chosen to raise excise duties instead of passing on the benefits to consumers." He further added, "The government is in Kumbhakarani sleep even as investors lose ₹19 lakh crore in market value."

This marks a surprising turnaround from the March 14 pre-election fuel price cuts, ending the price freeze in effect since May 2022.